---
title: What’s Behind the Recent Rally in Natural Gas Prices
description: Natural gas production remains robust so what caused the recent spike in natural gas prices? We briefly examine the recent events that caused the rally, and why it will likely be short-lived.
image: https://blog.gorozen.com/hubfs/Blog%20Images/Trailing-Three-Month-Gas-Prices-LinkedIn.png
---

[![GoRozen logo](https://blog.gorozen.com/hs-fs/hubfs/Gorozen_July2023/images/629a25c15755c930be0d624f_GoRozen-logo-horizontal-web.png?width=444&height=79&name=629a25c15755c930be0d624f_GoRozen-logo-horizontal-web.png "GoRozen logo")](https://www.gorozen.com/)

- FIRM

    - [HOME](https://www.gorozen.com/)
    - [ABOUT](https://www.gorozen.com/about)
    - [TEAM](https://www.gorozen.com/team)
- CONTENT

    - [COMMENTARIES](https://www.gorozen.com/commentaries)
    - [BLOG](https://blog.gorozen.com/blog)
    - [PODCASTS](https://www.gorozen.com/podcasts)
- HOW TO INVEST

    - [MUTUAL FUND](https://www.gorozen.com/gr-funds)
- [CONFERENCE](https://conference.gorozen.com/)
- [CONTACT](https://www.gorozen.com/contact)

[access latest research](https://www.gorozen.com/commentaries)

![Banner](https://blog.gorozen.com/hubfs/Gorozen_July2023/images/post-image.webp)

## What’s Behind the Recent Rally in Natural Gas Prices

11/08/2018

*Natural gas prices have surged 20% since mid-September, though the rally is likely behind us.*

 

Unless you follow the natural gas market or received a bill from your energy company recently, you may have missed the 20% run-up in natural gas prices. While still low relative to prices over the past decade, natural gas traded above $3.20 in early October for the first time since January, and have since rose further to approximately $3.50.

 

**Trailing Three-Month Natural Gas Prices**

[![Trailing Three Month Gas Prices](https://blog.gorozen.com/hs-fs/hubfs/Blog%20Images/Trailing%20Three%20Month%20Gas%20Prices.png?width=489&name=Trailing%20Three%20Month%20Gas%20Prices.png)](https://blog.gorozen.com/hubfs/Blog%20Images/Trailing%20Three%20Month%20Gas%20Prices.png)

Image Source: Nasdaq.com

 

This comes despite continued high production (we recently penned a blog illustrating the dramatic increase in well efficiency - [**read blog here**)](https://blog.gorozen.com/blog/natural-gas-supply-continues-to-surge) and a traditionally weak time of the year for gas prices.

 

As a backdrop, natural gas inventories remain at their lowest levels in over a decade, and this has amplified concerns and price volatility stemming from recent energy disruptions. The arrival of Hurricane Florence in the Carolinas resulted in Duke Energy shutting down two nuclear power reactors at its Brunswick power plant in mid-September. This resulted in a loss of approximately 17 gigawatts of power which was made up elsewhere, including gas-powered electricity sources.

 

**Duke Energy’s Brunswick Nuclear Power Plant**

![Charlotte News](https://blog.gorozen.com/hs-fs/hubfs/Blog%20Images/Charlotte%20News.jpg?width=600&name=Charlotte%20News.jpg)

Image source: https://www.bizjournals.com/charlotte/news/

 

Colder-than-expected temperature forecasts across part of the U.S. also led prices to tick higher for a period of time, although these forecasts largely did not come to fruition. Instead, the opposite happened - temperatures across much of the country remained higher than usual. This resulted in heightened levels of gas used for electricity through the end of September as consumers continued to run their air conditioners.

 

Even in the face of an inventory deficit, we simply cannot get constructive on US natural gas with production growing as quickly as it has been. For example, in July (the last month with available data), US dry gas production grew by 8.7 bcf/d on a year-on-year basis, another all-time growth record (the third such record set in the last 12 months). Furthermore, these records were achieved with a rig count that is 50% below where it was five years ago and 90% below its peak in 2008. This robust production, among other reasons, lead us to believe the recent rally in natural gas prices will be short lived.

 

We recently released our **[Q3 Commentary](https://info.gorozen.com/3q-goehring-and-rozencwajg-commentary-2018)**,*Into The "Red Zone" We Go*, which includes an in-depth analysis of the state of natural gas, and why we are more excited about global liquefied natural gas (LNG). You can download the full Q3 2018 commentary **[here](https://info.gorozen.com/3q-goehring-and-rozencwajg-commentary-2018)**.

 

 

[![NEW Q3 2018 G&R RESEARCH: "INTO THE RED ZONE WE GO"](https://no-cache.hubspot.com/cta/default/4043042/07d10c60-eee6-4fd3-9f8f-0100d3fb6db3.png)](https://cta-redirect.hubspot.com/cta/redirect/4043042/07d10c60-eee6-4fd3-9f8f-0100d3fb6db3)  

 

[Back](https://blog.gorozen.com/blog)

### Stay informed with Natural Resource Market Insights

### Recent Posts

Goehring & Rozencwajg Associates, LLC. The information provided on this website is intended to provide the investor with an introduction to Goehring & Rozencwajg Associates, LLC. Nothing on this website should be construed as a solicitation offer, or recommendation to buy or sell any security or as an offer to provide advisory services. Information on this website is intended only for United States citizens and residents. Nothing contained on this website constitutes investment, legal, tax, or other advice nor should be relied upon in making an investment or other decision. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment advisor or to invest in a fund.

This material may include estimates, outlooks, projections and other “forward-looking statements.” Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed. Investing entails risks, including possible loss of principal. Investments concentrated in natural resources involve a higher degree of risk than more diversified strategies. **Past performance is no guarantee of future results.**

Investment process, strategies, philosophies, portfolio composition and allocations, security selection criteria and other parameters are current as of the date indicated and are subject to change without prior notice.

Neither rankings nor recognitions by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any professional designation, certification, degree, or license, membership in any professional organization, or any amount of prior experience or success, should be construed by a client or prospective client as a guarantee that the client will experience a certain level of results if the investment professional or the investment professional’s firm is engaged, or continues to be engaged, to provide investment advisory services. A fee was not paid by either the investment professional or the investment professional’s firm to receive the ranking. The ranking is based upon specific criteria and methodology (see ranking criteria/methodology-to the extent applicable). No ranking or recognition should be construed as an endorsement by any past or current client of the investment professional or the investment professional’s firm.

Certain links may let you leave the Adviser’s website. The linked websites are not under the control of the Adviser, and we are not responsible for the content of any linked website, or any link contained in a linked website, or any changes or updates to such websites. Adviser is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, investigation, verification or monitoring by us of such third-party website. Any references to outside data, opinions or content are listed for informational purposes only and have not been verified for accuracy by the Adviser.  Third-party views, opinions or forecasts do not necessarily reflect those of the Adviser or its employees.

Unless stated otherwise, any mention of specific securities or investments is for illustrative purposes only. Adviser's clients may or may not hold the securities discussed in theri portfolios. Adviser makes no representations that any of the securities discussed have been or will be profitable.

- [ADV Part 3 - Form CRS](https://blog.gorozen.com/hubfs/Compliance%20Files/Goehring%20%26%20Rozencwajg%20Associates%20CRS%20Form%20ADV%20Part%203.pdf)
- [Cookie Policy](https://blog.gorozen.com/hubfs/Compliance%20Files/G%26R%20Cookie%20Policy.pdf)
- [Privacy Policy](https://blog.gorozen.com/hubfs/Compliance%20Files/G%26R%20Website%20Privacy%20Policy.pdf)

Goehring & Rozencwajg Associates LLC © 2023

```json
{
  "@context" : "https://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "Goehring & Rozencwajg Team",
    "url" : "https://blog.gorozen.com/blog/author/goehring-rozencwajg-team"
  },
  "dateModified" : "2018-11-08T16:22:17.063Z",
  "datePublished" : "2018-11-08T16:22:17.000Z",
  "headline" : "What’s Behind the Recent Rally in Natural Gas Prices",
  "image" : [ "https://blog.gorozen.com/hubfs/Blog%20Images/Trailing-Three-Month-Gas-Prices-LinkedIn.png" ],
  "mainEntityOfPage" : {
    "@id" : "https://blog.gorozen.com/blog/whats-behind-the-recent-rally-in-natural-gas-prices",
    "@type" : "WebPage"
  },
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "url" : "https://blog.gorozen.com/hubfs/Logos/GoRozen-logo-web.png"
    },
    "name" : "Goehring & Rozencwajg"
  }
}
```